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Organizational Structure and Departments for Your Startup Company

Employees of a startup company aren’t automatically ranked by hierarchies. Say, you only have three people working at the time; obviously, you can’t establish a hierarchy in that situation. But as your company grows, your organisation will gradually need to evolve into a structured one, divided into departments and teams.

Some essential functions can be outsourced, such as business financial management. For a fee, you can have your company’s financial reports prepared and curated, with the inclusion of financial forecasts and expert advice on how you can increase your sales and profits.

Organisational Structure

Newborn companies begin with a flat organizational structure, in which the owner and employees are all in the same rank. Many owners commit the mistake of not updating this kind of structure as the company grows, resulting in chaotic work culture and potentially the company’s downfall.

If you have less than fifty employees, it’s best to start with an informal organisational structure. The owner, or CEO, will be the at the topmost rank, and the rest shares an equal ranking below. This is also called a flat organisational chart, which works best for young startups, because everyone can make decisions based on their expertise and experience, as opposed to other structures that rely on hierarchy during decision-making processes.

As the organization grows, then so should its structure. You may start to adopt a formal organisational structure when you’ve surpassed fifty employees. In a formal structure, the CEO’s administrative tasks will be delegated among managers. In turn, the managers will be divided into different functions, each with their respective teams.

You can also design your organisational chart based on your company’s work process. For example, a functional org chart, wherein the admin, legal, marketing, accounting, and HR departments are separated to the departments who work on your products, a.k.a. your product designers, researchers, and engineers.

Another unique structure is a product-based org chart, wherein a specific team is assigned on a particular product, instead of one a whole department working on all of the company’s products.

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Departments

Establishing departments becomes necessary as your company grows. Your administrative tasks will be delegated among the department managers, so you as the CEO can focus on developing strategies to continue growing your business.

You need to have an administrative department, where you will be a part of, along with the managers who make decisions for the company. You can also call this the executive department.

The finance and accounting department is also crucial. As mentioned, accounting functions can be outsourced, but it would be necessary to have a regular employee in this department as well. This department manages and monitors all the money coming in and out of your business.

To promote and market your products, you should have a marketing and advertising department. Apart from product promotion, they also work on product pricing, packaging, and other creatives to pull in sales.

If you’re running a manufacturing company, then establishing a production and inventory department is a no-brainer. This department is in charge of monitoring and fulfilling client orders, as well as keeping a record of the inventory.

On the other hand, if you have a retail company or a B2B company, you need a sales department. Salespeople are part of this department, and they’re in charge of pitching your products to customers.

Take all of these into account as you grow your business. Remember that your employees and the culture of your organization are just as important as boosting your sales, so don’t take those for granted.